The Japanese Nikkei index surged 1.8% on its first trading day of the week, led by semiconductor-related stocks. This rally reflects continued optimism in global AI and technology sectors, representing a catch-up trade following record highs in global tech benchmarks like the Nasdaq. The positive movement in Tokyo reinforces the semiconductor industry's role as a primary driver for the Japanese equity market, supported by accelerating AI-linked demand.

Japan's inflation rate was reported at 1.9% for the year ending September 17, 2026, while the Bank of Japan raised interest rates to 1.25% on September 18, 2026. Investors remain focused on whether the semiconductor momentum can withstand the current monetary policy environment.